Alcoa (AA) AI Stock Analysis

• Market Cap: $8.31B
• Dividend Yield: 1.56%
• Average Volume (3M): 6.11M
• Price to Earnings (P/E): 8.3
• Beta (1Y): 1.83
• Revenue Growth: 22.04%
• EPS Growth: N/A
• Country: US
• Employees: 13,900
• Sector: Basic Materials
• Sector Strength: 73
• Industry: Aluminum
• EPS (TTM): 0.39
• Shares Outstanding: 258,902,340
• 10 Day Avg. Volume: 7,073,113
• 30 Day Avg. Volume: 6,110,647
• PEG Ratio: 0.53
• Price to Book (P/B): 1.34
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 36.56
• Enterprise Value/Market Cap: 0.82
• Enterprise Value/Revenue: 0.29
• Enterprise Value/Gross Profit: 23.16
• Enterprise Value/Ebitda: -4.51
• 1Y Price Target: $33.00
• Price Target Upside: 3.58% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 10

• Rating: 72 Outperform
• Price Target: $34.00 ▲(6.72%Upside)

Alcoa's strong valuation and recent corporate strategy to unlock shareholder value are significant positives. However, challenges in cash flow management and increased tariff costs present notable risks. The technical outlook is supportive, with positive momentum indicators.

Positive Factors

Cash Flow

Solid free cash flow generation this quarter with an optimal capital structure target in sight.

Financial Performance

Alcoa delivered slightly better-than-expected results, despite a challenging operating environment.

Tax Credits

The company will be receiving IRA production tax credits for aluminum production in the US of ~$50-60 million per year.

Negative Factors

Operational Challenges

Alcoa flagged a permitting delay for its Australia bauxite mines, adding to operational challenges.

Shipment Reduction

The restart process at San Ciprián smelter will result in a 150kt reduction to aluminum shipments.

Tariff Policy

Uncertainty amid abnormal volatility in alumina prices and the negative impact of new US tariff policy on aluminum.

Alcoa Business Overview & Revenue Model

Company Description

Alcoa Corporation, together with its subsidiaries, produces and sells bauxite, alumina, and aluminum products in the United States, Spain, Australia, Iceland, Norway, Brazil, Canada, and internationally. The company operates through three segments: Bauxite, Alumina, and Aluminum. It engages in bauxite mining operations; and processes bauxite into alumina and sells it to customers who process it into industrial chemical products, as well as aluminum smelting and casting businesses. The company offers primary aluminum in the form of alloy ingot or value-add ingot to customers that produce products for the transportation, building and construction, packaging, wire, and other industrial markets. In addition, it owns hydro power plants that generates and sells electricity in the wholesale market to traders, large industrial consumers, distribution companies, and other generation companies. The company was formerly known as Alcoa Upstream Corporation and changed its name to Alcoa Corporation in October 2016. The company was founded in 1888 and is headquartered in Pittsburgh, Pennsylvania.

How the Company Makes Money

Alcoa makes money primarily through the production and sale of bauxite, alumina, and aluminum products. The company's revenue model is centered around its vertically integrated operations, which allow it to control costs and optimize its supply chain from mining to finished product. Key revenue streams include the sale of bauxite to third-party customers, the production of alumina for both internal use and external sales, and the fabrication of aluminum products for various industries. Alcoa's financial performance is also influenced by aluminum market prices, operational efficiencies, and strategic partnerships with major industrial players. Additionally, the company invests in innovation and sustainability initiatives to enhance product offerings and meet the evolving demands of its customers.

Alcoa Financial Statement Overview

Summary

Alcoa demonstrates strong revenue growth and operational efficiency improvements, resulting in better profitability metrics. The balance sheet is strengthened by lower leverage and improved equity returns. However, cash flow management poses a challenge with negative free cash flow growth.

Income Statement

Alcoa shows a strong revenue growth with a 7.9% increase in TTM compared to the previous year. The gross profit margin improved significantly to 39.7% TTM. However, net profit margin remains low at 6.8% TTM, albeit an improvement from the previous year. EBIT and EBITDA margins have both improved to 33.5% and 16.9% TTM respectively, indicating better operational efficiency.

Balance Sheet

Alcoa's balance sheet reflects a robust equity position, with an equity ratio of 39.9% TTM. The debt-to-equity ratio has improved significantly to 0.01 TTM, indicating lower leverage. Return on equity has improved to 14.8% TTM, showing better profitability. However, the high total liabilities pose a risk to financial stability.

Cash Flow

Operating cash flow has increased by 47.9% TTM, showing strong cash generation. However, free cash flow growth is negative, declining by 17.1% TTM, highlighting concerns over capital expenditures. The operating cash flow to net income ratio is 1.07, indicating efficient cash conversion, but free cash flow to net income ratio remains low at 0.40.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	11.89B	10.55B	12.45B	12.15B	9.29B
Gross Profit	1.85B	738.00M	2.24B	3.00B	1.32B
EBITDA	1.09B	48.00M	1.32B	1.86B	826.00M
Net Income	60.00M	-651.00M	-123.00M	429.00M	-170.00M
Balance Sheet
Total Assets	14.06B	14.15B	14.76B	15.03B	14.86B
Cash, Cash Equivalents and Short-Term Investments	1.14B	944.00M	1.36B	1.81B	1.61B
Total Debt	2.82B	1.97B	1.87B	1.87B	2.62B
Total Liabilities	8.91B	8.31B	8.17B	8.74B	9.84B
Stockholders Equity	5.16B	4.25B	5.08B	4.67B	3.31B
Cash Flow
Free Cash Flow	42.00M	-440.00M	342.00M	530.00M	41.00M
Operating Cash Flow	622.00M	91.00M	822.00M	920.00M	394.00M
Investing Cash Flow	-608.00M	-585.00M	-495.00M	565.00M	-167.00M
Financing Cash Flow	201.00M	57.00M	-768.00M	-1.16B	514.00M

Alcoa Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 31.86
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AA, the sentiment is Positive. The current price of 31.86 is above the 20-day moving average (MA) of 30.39, above the 50-day MA of 29.14, and below the 200-day MA of 34.02, indicating a neutral trend. The MACD of 0.70 indicates Negative momentum. The RSI at 60.46 is Neutral, neither overbought nor oversold. The STOCH value of 94.08 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AA.

Alcoa Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
USLM	78 Outperform	$3.10B	25.76	25.44%	0.20%	17.83%	50.28%
AA	72 Outperform	$8.31B	8.26	20.01%	1.56%	22.04%	―
CENX	70 Outperform	$2.13B	20.09	18.03%	―	11.42%	-49.21%
KALU	70 Outperform	$1.42B	23.78	8.89%	3.50%	4.62%	56.04%
CSTM	68 Neutral	$2.02B	31.31	7.93%	―	-2.29%	-48.13%
CLF	56 Neutral	$5.57B	―	-25.79%	―	-12.14%	-4329.00%
Sector *	44 Neutral	AU$1.51B	-6.04	-41.37%	3.90%	-3.45%	-43.04%

Alcoa Corporate Events

Alcoa Sells Stake in Ma’aden Joint Venture

On July 1, 2025, Alcoa Corporation announced the closing of its sale of a 25.1% ownership interest in the Ma’aden joint venture to Saudi Arabian Mining Company, receiving approximately $1.35 billion in shares and cash. This transaction allows Alcoa to record a gain of approximately $780 million in the third quarter of 2025 and reflects the company’s strategy to unlock shareholder value while maintaining a stake in Ma’aden for future financial visibility.

The most recent analyst rating on (AA) stock is a Buy with a $50.00 price target. To see the full list of analyst forecasts on Alcoa stock, see the AA Stock Forecast page.

Alcoa Elects Directors and Approves Auditor Appointment

On May 8, 2025, Alcoa Corporation held its Annual Meeting of Stockholders, where all 11 director nominees were elected for a one-year term. Additionally, stockholders approved the appointment of PricewaterhouseCoopers LLP as the independent auditor for 2025 and endorsed the executive officer compensation for 2024, reflecting continued confidence in the company’s leadership and strategic direction.

The most recent analyst rating on (AA) stock is a Buy with a $50.00 price target. To see the full list of analyst forecasts on Alcoa stock, see the AA Stock Forecast page.